T A B L E__T A L K What's going on with the International Monetary Fund? Share the latest on the global financial crisis in the Business and Personal Finance area of Table Talk   Search for business, personal finance and more at barnesandnoble.com Search by:  Keyword Title Author   R E C E N T L Y The Jordan Effect: What's race got to do with it? By Leon Wynter The colorblind world depicted by Madison Avenue isn't our racial reality yet -- but it's a step in the right direction (01/29/99) E-commerce: Don't believe the hype By Heather Chaplin Online shopping leaves me frustrated, bored and feeling like a schmo (01/22/98) Help! I have portfolio deficit disorder! By Daren Fonda My life fell apart after I discovered I could my check my stock's earnings and losses online -- whenever I wanted (01/15/99) Consumer retorts By Heather Chaplin The motto of the consumer warrior must be: Never surrender, never apologize and never forget there is no rational justification for $28 bank charges (01/08/99) Money talks By Heather Chaplin If you want to know if a woman is wealthy, check her pores, not her pearls (12/18/98) - - - - - - - - - - - - - - - - Browse the Reluctant Capitalist archives - - - - - - - - - - - - - - - - Salon Columnists		[ T H E_.R E L U C T A N T_.C A P I T A L I S T ]________   ------ |IF YOU'RE STRUCK WITH THE URGE|----------- |--------TO OWN A HOME, CONSIDER FIRST| |WHETHER IT'S A GOOD TIME TO BUY.|--- - - - - - - - - - - - - - - - - BY HEATHER CHAPLIN I recently made the move from apartment to house. I'm still a lowly renter, but just the fact that my home is unattached, has more than three rooms and is big enough that I have to shout when the phone is for my boyfriend fills me with a strange mixture of desire and dread. The first few nights in my new home, I lay in bed, prickly with fear, unnerved by the lack of other human noises. Where were the footsteps pounding through the ceiling? Where was the music blasting through the wall? Now, out of an apartment building for the first time since leaving the nest, I have only the sounds of the wind and an occasional car passing to blame for my insomnia. Lying awake, listening to all that silence, I find myself thinking about actually buying a home. I think about planting a garden; then I think about foreclosure. I think about accumulating equity; then I think about having to save for a down payment. Somewhere deep down, I don't think at all but just buzz with excitement. Perhaps the urge I feel is similar to that which many women in their late 20s describe -- an inexplicable craving for children. Is there also a biological real estate clock that begins to tick away, until you can finally paint your walls and refinish your floors without lamenting that it's someone else's house you're beautifying? Perhaps it's mother nature's way of reminding us it's better to own than rent. According to a report released last week by the Department of Housing and Urban Development, a lot of people's clocks have been going off lately. Apparently 1998 was a record year for homeownership, with 66.3 percent of the nation's households owning their own homes. But how do you know if the time is right for you to join the masses? The National Association of Realtors claims that buying a home has never been so affordable, thanks primarily to an increase in the national median income and record-low interest rates -- on a 30-year fixed-rate mortgage the rate was 6.74 percent on Feb. 1, compared with 7.12 percent just one year ago. With the tax breaks that accompany home ownership, you can think of that rate as being equivalent to 5.5 percent interest, said Kathy Stepp, a financial planner in Kansas City. The National Association of Realtors' composite housing affordability index for the fourth quarter of 1998 increased by 5.7 percent. Scoring 100 on the index means a household earns the exact amount needed to purchase a median-priced home. In the fourth quarter, the index was at 138.3 percent, meaning that a household earning the median income, $45,735, can more than afford the median house, which is $131,000, by NAR's calculations. In addition, some changes in national regulations favor homeownership, such as a decision last year permitting first-time buyers to remove as much as $10,000 from their IRA accounts without being penalized. Now, I know big city folks are reading this and thinking, What the --? Because if you live in a city like San Francisco or New York, the rest of the country's rah-rah enthusiasm probably seems downright absurd. In the San Francisco Bay Area, for example, which has the most expensive real estate in the country, the median home price is about $330,700. In other words, the interest rates could be 100 percent considering the chance most San Franciscans have of buying a house in the city. Compounding the problem in cities like San Francisco and New York is the proliferation of the newly affluent and the newly stinking rich, who raise the ante for all of us -- thank you, Wall Street and Silicon Valley. As Judy Langheld, a real estate broker in northern New Jersey put it: "This is not a normal market." Langheld said there is so much competition for homes in her area that she can barely get clients in to see a house before it sells. She said the number of young people with money to burn is like nothing she's seen in 23 years in the business. So it's the best of times and it's the worst of times. Let's pretend, though, that you're willing to live in a less desirable area -- Alameda instead of San Francisco, Queens instead of the Upper East Side. From a strictly financial perspective, there's no question that if you have the means to buy a house, you should, said Stepp, the financial planner. Putting money into a down payment instead of the stock market -- which has been doing, shall we say, well in recent years -- may seem like heresy at first, but Stepp suggested thinking about it not as an investment but rather as a place to live. Instead of concentrating only on missed stock opportunities, think about the hundreds of thousands of dollars you won't be throwing away on rent. N E X T+P A G E | $122,794 on rent vs. $73,207 on mortgage payments - - - - - - - - - - - - - - - - - Become a Salon member. Click here.